As food tech entrepreneurs stay vigilant on Amazon’s moves, success is achievable for those who capitalize on the logistics giant’s shortcomings.
At least that’s what Patricia Nakache, a general partner at Trinity Ventures, suggests in a “TechCrunch” article.
Trinity Ventures is an early stage venture capital firm. The company’s portfolio includes brand names like Starbucks, P.F. Changs’s and Jamba Juice.
“We’ve seen food trends come and go. Every so often we come across something more fundamental and lasting than a trend: a seismic shift. Starbucks’ visionary leader Howard Schultz helped create one such shift,” says Nakache referring to how the coffee company taught Americans to appreciate an elevated customer experience and better quality products.
Now, we are experiencing a different kind of seismic shift.
The health movement has penetrated Americans day-to-day lives in such a way that it has created “a deepened awareness that what we consume directly impacts our health and well-being and reflects our core values and aspirations,” says Nakache.
The Trinity Ventures general partner points out that there are opportunities for growth in a key area that Amazon has not yet completely dominated. This sector is the e-commerce of groceries. The reason why is probably due to the many logistic challenges (sourcing, food prep, packaging and distribution of perishable consumables) that come with such an endeavour.
Nakache’s advice to entrepreneurs is:
- focus on building authentic, aspirational brands
- create proprietary food products
- cater to a niche market
Amazon’s global advantage, apart from operations and distribution, is its ability to collect data and use that information to leverage consumer behavior— for example, dynamic pricing.
Something significant to keep in mind is that as technology becomes so integrated with the way we do business, there are also new regulations that are being put in place around the world to protect consumer’s privacy.
The European Union passed a web privacy legislation last year, called General Data Protection Regulation (GDPR), that aims to protect consumers from having their purchase history available for e-commerce companies to target. This regulation will go into effect May 2018, affecting American companies that do business in Europe, like Amazon.
As a “Food Navigator” article points out, “shoppers are emotional, and the bland, price-driven environments that we see online are simply not the future.”
More of a reason to appeal to consumers in alternative way using behavioral science as a tool to develop “brand emotion.”